As the dust settles on the autumn statement, some of its less conspicuous features, such as the commitment to large-scale asset sales, will come under closer scrutiny. The chancellor’s determination to balance the books depends on asset disposals, ranging from the gargantuan sell-off of RBS to the small but important and controversial example of Channel 4.

My approach to asset sales when I was in office was pragmatic. The issue of whether assets should be privatised or nationalised should depend on the merits of individual cases rather than dogma. I advocated the nationalisation of banks in the financial crisis of 2008 and their gradual return to private ownership, including the sale, at a profit, of Lloyds shares, the bank having demonstrated a commitment to wider economic objectives such as lending to small businesses. RBS should follow the same trajectory in due course.

One of my first actions as business secretary was to bring forward legislation for the sale of Royal Mail: necessary to rescue a declining business by giving it access to capital markets. The sale duly happened when I was satisfied that public service obligations had been enshrined in law, the publicly owned Post Office network had been separated, a generous worker shareholding established and the shareholder executive had secured value for money. So I don’t think I could be accused of Clause 4 tendencies.

At the same time, I blocked asset sales that were demonstrably contrary to the public interest. I stopped further sale of Royal Mail shares since this removed a strategic anchor investor – the state – committed to the strategy of long-term modernisation. I also stopped the sale of C4 and a clutch of bodies such as the Met Office, the Land Registry, Companies House and Ordnance Survey, which were already acquiring a more commercial and innovative edge as independent agencies, on top of their public interest function for business and wider society. The Treasury obsession with selling off the family silver to realise cash quickly, regardless of merit or the wider public interest, clashed with my approach and the transfer of the shareholder executive to the Treasury was one of the first acts of the new Tory government.

A sale would imperil the effective operation of the UK’s TV industry

We are now seeing clearly the dangers of an opportunistic approach that lacks both the checks and balances of the coalition and rigorous approach to costs and benefits. Asset sales do not, by themselves, improve the public sector balance sheet – public debt is reduced but so are assets, leaving net debt unchanged. The key driver is the wish to mobilise cash, even though one-off revenue windfalls do nothing to cure structural imbalances between revenue and spending. When relatively small sums are involved, as with C4, one has to challenge the underlying rationale. The current belief in government is that it could raise up to £1bn from the sale of C4 if regulatory restraints were stripped to the minimum. By contrast, Channel 5 was sold by Richard Desmond for £450m, four years after he bought it for £100m. Channel 5 is a smaller operation, with fewer viewers and minimal public service obligation, so £1bn seems to represent a plausible upper limit. Much depends on the monetary value of the public service obligation (PSO).

The PSO has no fewer than 11 qualitative obligations enshrined in legislation and six quantitative obligations in the form of metrics monitored by Ofcom. The responsibilities include: being innovative and different and thereby strengthening the country’s creative sector, challenging the status quo, providing alternative services and points of view, championing programming for hard-to-reach audiences among the young and diverse communities. It is difficult to put a value on the activities under the PSO, but it is possible to isolate some specific elements. The 2014 annual report estimates that, of the £600m spent on content, £430m went to original content from UK producers. The supply chain supports around 19,000 jobs. Much of that would be lost if the channel became a vehicle for repeats, quiz shows and old films. The Channel 4 News brand is seen as distinct and respected, but is a costly commitment. C4 film-making is comparable to the BBC’s, if not bigger.

Another way of looking at the numbers is to estimate the additional revenue that would be needed to pay dividends from what is currently a not-for-profit company. David Abraham, the CEO of Channel 4, estimates that with a 20% margin (compared with ITV’s 28%), £200m a year would be diverted from programming to meeting the expectations of private investors.

When I challenged the value of the sale in government, the advice I received led me to conclude that a sale that fully protected the PSO – and provided a realistic return to an investor – would produce little or no revenue.

In practice, there would be no point proceeding on that basis, so the legislation to privatise would have to erode the explicit obligations or give the investor scope to ignore the spirit, if not the letter, of them. Much will depend on the diligence of MPs and lords: they will have to confront the government if it seeks to cut corners to secure a profitable sale.

A sale would imperil the effective operation of the UK’s TV industry; plurality would be reduced and the BBC, itself in retreat, would be left as the sole meaningful provider of public service broadcasting.